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If backed by governments, the rules, which were agreed by the UN general assembly in December 2014, would apply to all existing investment treaties - numbering over 1400 - that the EU and Member States have in place.

The commission says that the regime, which includes access to documents and making hearings open to the public, as well as allowing interested third parties to make submissions to Investor State Dispute Settlement cases, have been incorporated into free trade agreements struck recently with Canada and Singapore.

Signing up to the UN rules would be a “welcome and necessary reform of the ISDS system worldwide, making old agreements more transparent,' said EU trade commissioner Cecilia Malmstrom.

The commission proposal, which will likely be discussed by ministers in March, is the latest attempt by the Brussels executive to demonstrate it is being open and transparent when negotiating international treaties on behalf of the EU.

"The need for more transparency, independence of arbitration judges and room to regulate for governments is broader than only TTIP," said Dutch MEP Marietje Schaake, who speaks for the liberal ALDE group on trade.

"European governments must show that they take the criticism of ISDS seriously and that they are willing to act to improve it."

"It's positive that the Commission puts pressure on EU member states to open up investor-state disputes," Corporate Europe Observatory spokesperson, Pia Eberhardt, told EUobserver.

"But lets not lose sight of the forest for the trees," she added. "The commission is pushing for more transparency to make the investor-state dispute settlement system more acceptable - but it does nothing to address its basic flaws."

EU and US trade officials convene in Brussels next week for the eighth round of talks on a transatlantic trade and investment partnership (TTIP). At their December EU summit, leaders gave negotiators a deadline of the end of 2015 to conclude talks on the pact, which the commission estimates could be worth €100 billion extra to the EU’s economic output.

Talks on TTIP have progressed in the 18 months since talks began, but the ISDS mechanism has been the main cause of public scepticism about an EU-US trade agreement, amid concern it would allow US firms to erode EU consumer standards and intimidate governments against regulating.

ISDS, together with plans to harmonise regulation by establishing ‘mutual recognition’ of EU and US rules by the two blocs’ jurisdictions, were the main topics of discussion at a hearing in the European Parliament on Wednesday (January 28).

German centre-left MEP Bernd Lange, who chairs the parliament’s international trade committee, and has been tasked with drafting the parliament’s position at the half-way stage of talks, has indicated that investor protection can be guaranteed by their national courts.

“Should ISDS provisions be included in the TTIP, it seems to be clear, that further reforms to the current model, are critical to avoid the problems that have arisen under the provisions in existing free trade agreements (FTA)s,” Lange’s report notes.

Lange has also warned that “absolute transparency” would be needed in order to convince a sceptical public of TTIPs value.